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Everything to Know About Hiring a Franchise Lawyer

Are you considering diving into the world of running a franchisee? There might be an aspect that you may not have evaluated yet – hiring a lawyer for your upcoming franchisee. Your money is on the line; it will probably be a business that you will have to sustain for a long time.

You can never be too prepared when there is so much at stake.

Yes, legal counsel costs money, but they earn it right back by saving you from bad decisions, providing valuable counsel, negotiating with the franchiser for a better contract, and letting you concentrate on your operations without worrying.

Do You Need a Franchise Lawyer?

fizkes/Shutterstock: Consulting a franchise lawyer

While a general advocate may do just fine in drafting and counseling you on contracts, a lawyer specializing in franchise operations tends to have internal knowledge about workings of this line of business. Apart from being thoroughly acquainted with Franchise Disclosure Documents (FDD), they deal with some of the most common franchisors repeatedly, meaning they are well-versed with brands.

A franchise lawyer will be your best bet at getting your desirable contracts through negotiation and mediationusing their specialized knowledge.

How Will a Franchise Lawyer Benefit My Business?

PhuShutter/Shutterstock: Perks of having a franchise lawyer

  • Royalty Payments – Franchisor may collect royalties straight out of your bank account, which you would not want in a liquidity crunch. A lawyer can help you negotiate a better payment schedule. 
  • Closing of Business – In many contracts, a clause is present which states that a franchisee cannot be closed for a certain amount of time. This may result in additional losses to the franchisor in case the business goes south. An attorney can help you by getting a less restrictive option. 
  • In case of a dispute – Some franchisors mandatorily have a clause of designated mediation time in case of a disagreement between the franchiser and franchisee. While this is an ideal clause in itself, it sometimes results in the delay of filing a lawsuit. It is essential to ensure that the time for mediation and filing of the suit do not clash.
  • Deciding a territory – As a business owner, you must have staked out a location where customers are ample, and the probability that business will bloom is high. The franchisor can sometimes be too constraining about deciding on a territory, and you need a counsel that negotiates a contract that is not limiting.

At Which Stage Should I Hire a Franchise Lawyer?

fizkes/Shutterstock: Time to hire a franchise attorney

The most appropriate time to hire this attorney is before you think about signing the franchise agreement. A thorough review needs to be conducted to make sure there are no “suspicious” clauses.

Legal contracts can be complicated for a layman to understand; you also need a barrister to help you comprehend what you are signing. 

Where Do I Find a Good Franchisee Advocate?

Choosing the right lawyer is crucial for the success of your business. Thankfully, there are multiple ways to find a great one. International Franchise Association’s website has a list of attorneys that specifically deal with the franchising contracts. Bar Association and Small Business Association also have a list of local advocates available. You can also ask fellow franchisee owners for recommendations.

Before going on a search for a franchisee lawyer, fine-tune your checklist for an ideal attorney, research well on the questions you need to be asking to get the right answers. Many advocates also have a digital presence where you can find reviews, organizations they are associated with, their publications, and any other information that can help you make a decision.

A franchise lawyer may charge somewhere from $400 to $1,000 depending on what exactly will their job description entails. The bill may seem a little steep, but it might be a rewarding investment.

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